Oracle Extends Bid for PeopleSoft
Oracle Corp., which has spent the last year trying to acquire PeopleSoft Inc. in a hostile takeover, on Monday extended its $7.7-billion bid for the software maker to Aug. 27.
The company’s tender offer, valued at $21 a share, was set to expire Friday.
Redwood City, Calif.-based Oracle said 4.69 million shares, or less than 2% of PeopleSoft shares, had been tendered as of Monday.
The extension takes Oracle past the July 20 date scheduled for closing arguments in its federal court defense of its hostile bid for Pleasanton, Calif.-based PeopleSoft, the No. 2 maker of business-management software.
The government is trying to block the takeover, saying it would cut the number of competitors and give Oracle, the No. 3 maker of such software, leverage to raise prices. Germany’s SAP is the market leader.
On Monday, both Oracle and the Justice Department made court filings that summarized their arguments after a monthlong trial that concluded July 1 in San Francisco.
Oracle argued, as it had all along, that an abundance of competitors and the ability of large customers to negotiate discounts would prevent software prices from increasing if Oracle acquired PeopleSoft.
The company also argued that the government had defined an artificial product market that included only Oracle, PeopleSoft and SAP and ignored other competitors, such as Microsoft Corp., outsourcing companies and makers of specialty soft- ware such as Lawson Software Inc.
“There are numerous product and service alternatives that compete with SAP, Oracle and PeopleSoft,” Oracle said in its filing.
The Justice Department countered in its filing that Oracle offered deep discounts to steal customers from PeopleSoft.
“There are no other vendors,” the U.S. said in a 300-page filing, “that a customer could turn to.”
Uncertainty over the case contributed to lower second-quarter profit and slower sales at PeopleSoft, as customers were hesitant to sign contracts without knowing if the company would be absorbed by Oracle, Chief Executive Craig Conway said last week.
Net income declined to 3 cents to 5 cents a share from 11 cents a year earlier, PeopleSoft said. Sales rose from $655 million to $665 million, missing the company’s forecast of at least $675 million.
Monday’s “proposed conclusions of law” and “findings of fact” filings from Oracle and the Justice Department are supposed to provide U.S. District Judge Vaughn Walker with a road map of the facts in the case as each side sees them. Walker can use the facts or come up with his own finding.
Once closing arguments are made, Walker is expected to rule about four to six weeks later, according to attorneys for the two sides.
Shares of Oracle rose 6 cents to $11.09 in Nasdaq trading. They have fallen 16% this year. Shares of PeopleSoft, also on Nasdaq, increased 13 cents to $17.18. They have declined 25% this year.
